Cellular replacement therapy using mesenchymal stem cells (MSCs) and/or the delivery of growth factors are at the forefront of minimally invasive biological treatment options for Degenerative Disc Disease (DDD). In this study, we compared the therapeutic potential of a novel drug candidate, NTG-101 to MSCs, including rat cartilage derived stem cells (rCDSCs), bone marrow stem cells (rBMSCs) and human Umbilical Cord Derived Mesenchymal Stem Cells (hUCMSCs) for the treatment of DDD. We induced DDD using a validated image-guided needle puncture injury in rat-tail IVDs. Ten weeks post-injury, animals were randomized and injected with MSCs, NTG-101 or vehicle. At the end of the study, histological analysis of the IVD-Nucleus Pulposus (NPs) injected with NTG-101 or rCDSCs showed a healthy or mild degenerative phenotype in comparison to vehicle controls. Immunohistochemical analysis revealed strong expression of aggrecan, collagen 2, brachyury and Oct4 in IVD-NPs injected with NTG-101. Our results also demonstrated suppression of inflammation induced p38 and NFκB resulting in inhibition of catabolic genes, but activation of Smad-2/3, Erk-1/2 and Akt-dependent signaling inducing anabolic genes in IVD-NP on treatment with NTG-101. In conclusion, a single injection of NTG-101 into the degenerative disc demonstrated superior benefits compared to stem cell transplantation.